Influx of seniors who stay in family home face ballooning borrowing costs: Dale Jackson

A new report from the Canada Mortgage and Housing Corporation (CMHC) finds more seniors are choosing to age in their homes longer before downsizing or renting.

Those who tap into the equity in those homes to meet day-to-day living expenses might not fully realize how the recent spike in borrowing costs will eat away at their nest-eggs much faster.

According to Statistics Canada, the number of seniors who borrow from their homes has held steady as interest rates spiked by nearly five per cent since March 2022.

That means home owners who draw cash through reverse mortgages and home equity lines of credit (HELOCs) are not only paying more for the amount they borrow, but the growing balances will compound at a faster pace, leaving less money to downsize, rent, or pass along to beneficiaries.